Health Care Cost Comparisons 

By Jim Woodward

Comparisons - 1965 to 2000 approximate values

            Item                                1965                 2000                        Increase

Gross Domestic Product           $719.2 billion   $9817.0 billion 13.6 times

Per Capita Income                    $2,868             $29,797                       10.4 times

Median Home Price                  $12,000           $119.600                     9.9 times

Cost of Gasoline                       $.30 p/gal         $3.00 p/gal (2006)       10 times

Health Care Costs                 $5.1 billion      $1,199.8 trillion          235.3 times

Est. Life Expectancy                 70.0 years        77.3 years                    1.1 times

It appears that most items have maintained parity with the exception of health care costs. Health care costs are approaching almost 12% of GDP.  This imbalance is probably due to the entrance of personal & group health insurance plans, Medicare, Medicaid, and other similar forms of government and private subsidies for health care.  It is probably a good thing for the actuaries at Social Security that life expectancy does not correlate with the amount spent on health care costs.  If we develop a “government controlled“health-care system,” we will probably be spending three or four times that amount now spent on health care.  I don’t think that will be feasible or fiscally sound (for your household budget) unless the government raises taxes on EVERYONE.  Then the government can focus its attention to taxing ALL Social Security benefits rather than just half the monthly benefits paid to beneficiaries.  If this health-care institution is created, then someone is going to have to feed it!

Two Solutions: 

(1)        Nationalize or socialize all forms of health care and let government bureaucrats and their clerical staffs (non-medically trained staffs) determine when, where, and how much medical care you get; or,

(2)        Have health care providers operate in the free market system and allow competition to work based on the economic principles of price and demand and supply and demand.

More and more people are losing their health insurance because of rising costs, which I feel, is directly related to insurance and government subsidies which tend to raise health care costs.  These subsidies provide no incentive for health care providers to contain their costs regardless of their objectives.  Managed care does not work and only promotes the continuous climb in health care costs and the increase in the number of uninsured persons.  If health care providers cannot make it in the free market system, they should have studied another subject and taken up another vocation.

Included in the costs of group health insurance are two factors (1) Administrative Costs; and, (2) Reserves (cash paid in by policy holders and set aside for incurred and unreported claims after a policy has expired or been replaced.

Pharmaceutical Expenses: 

Today most people think that the oil companies are price gouging and I thought that way until I did some calculations for only one medication (of three) that I will be taking for the remainder of my life.  I take 20mg. of Lexapro daily and each tablet weighs about 3.8 grains (7,000 grains in one pound); each tablet costs $2.785 each.  One gallon of gasoline weighs about 7 pounds and if I were to purchase one gallon of Lexapro (assuming that dry weight and liquid approximate the same volume) it would cost me about $35,912.00.  These pills are renewable chemical compounds – hydrocarbon fuels are not.  Moreover, the only risk in producing pharmaceuticals is that the Trial Lawyers Association might be forced out of their business of scavenging for bones.

Perhaps patents on brand-name medications should expire earlier to allow for the production of generic drugs. Moreover, perhaps these pharmaceutical giants should practice some fiscal responsibility, reduce un-necessary advertising expenses, cut some executive bonuses and tighten their belts.  People can control their use of gasoline but some of us cannot control our use of required medications without becoming a statistic lost somewhere in a Mortality Table but then “early losses” would probably make the actuaries for the Social Security system dance for joy and all elected officials can more carefully focus on their primary objective – stay in office (re-election campaigns and fund-raising.)

The best things for all older people, perhaps all ages, to do is:

1. Exercise daily – walk, lift weights, swim, ride a bicycle, raise the physical activity bar for yourself, in general - do something – the best time to do something is when you feel like doing nothing;
2. Drink plenty of water, eat fresh fruit, and don’t forget the greens (veggies);
3. If you have more prescription pills than you can put in a shopping bag, try to figure out which pills you can do without and then quit taking them;
4. Have some quiet time;
5. Think positive thoughts;
6. Quit running to the doctor every time you sneeze or have an unexplained ache or pain;
7. Take up a hobby that will get you away from television;
8. Take time out for a good long laugh;
9. Quite watching the news media – too much depressing news these days;
10. Stay in contact with friends and arrange for a weekly “eat-out” session;
11. Call someone that you have not spoken with in a while and renew that friendship;
12. Make some noise, flap your wings, and tell people what you think;
13. Get rid of any hostility that you may be holding on to . . .

The above are not cure alls but it sure beats sitting around and feeling sorry for yourself.  We don’t live forever, but I would rather take control over my own life, than submit to some feckless government bureaucrat that tells me what I can or cannot do or have.

Do it now!  You’re running out of time and burning daylight (as John Wayne would say).

~Jim Woodward